A Superior Court decision released today has confirmed that an insured seeking an order setting aside a settlement of accident benefits must first repay money paid pursuant to the settlement.
In Lindsay v. Martin, the text of which can be accessed at http://www.canlii.org/on/cas/onsc/2004/2004onsc11375.html, the insured had settled his claim for accident benefits with York Fire and Casualty Insurance. The amount was $10,000. The insured did not obtain legal advice about the settlement. It was also alleged that he lacked mental capacity to enter into the settlement.
Justice Douglas Belch was critical of York, denying it costs because of a “failure to use common courtesy and respond to numerous requests of the plaintiff for information”. He also noted that the provisions of the legislation result in an impecunious insured facing “a Herculean task” in rescinding a settlement. But he agreed with York’s submission, that the amendments to Regulation 664 make it mandatory that settlement funds be returned to the insurer as a condition precedent to rescission of a settlement of SABS. Accordingly, the insured’s action against York was stayed pending repayment of the settlement monies.